• by Shankar Gupta , March 6, 2007

Google CEO Eric Schmidt, speaking at an investor conference in San Francisco on Monday, said that YouTube's strategy is to secure as much licensed content as possible while developing the ad model to monetize it, despite the company's recent failure to secure major content deals with Viacom and CBS.

"Our strategy is first and foremost to get as much licensed content on YouTube as possible, index everything, and develop the advertising tools that will allow people to make money," Schmidt said, adding that users who view content online are still valuable to media companies, even if they don't view the content on their own sites. "You can monetize them, you can get them excited, you can sell things to them."

Media companies thus far have not been entirely cooperative with YouTube's stated strategy, however. In late February, CBS ended talks to extend its deal with YouTube.com, which would have allowed shows like "The Late Show With David Letterman" to be aired on the site.

Three weeks before that, Viacom demanded that YouTube remove all of its more than 100,000 clips from the site, releasing a statement that said: "After months of ongoing discussions with YouTube and Google, it has become clear that YouTube is unwilling to come to a fair market agreement that would make Viacom content available to YouTube users."

Despite some media companies' apparent reluctance to move their content online, Schmidt predicted to investors that the Internet will soon catch up to television as an advertising medium. "It should be the case that monetizable viewing habits on the Internet should catch up with those on television," he said.